When Is the Right Time to Remortgage?

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When Is the Right Time to Remortgage?

Many homeowners often ponder over the ideal time to remortgage their property. The answer, straightforwardly, is not to delay. Starting the remortgage process early—approximately six months before your current deal expires—is advisable. This proactive approach not only provides ample time to scout for a competitive offer but also aligns well with current market trends, aiming to lock in the most favourable interest rate possible under prevailing conditions.

If a better deal eludes you at the end of your term, you might find yourself defaulting to your lender’s standard variable rate (SVR), which is likely to be significantly higher, thus inflating your monthly repayments considerably.

Understanding the Remortgage Landscape in the UK

Remortgaging is a prevalent practice in the UK, with a considerable majority of homeowners opting for fixed-rate solutions. According to data from UK Finance, out of approximately 8.5 million active residential mortgages, 81% are fixed-rate, 8% are tracker mortgages, and the remaining 11% adhere to the lender’s SVR—translating to around 935,000 individuals on this potentially costly rate.

Transitioning to a lender’s SVR can occasionally be the right move, but it’s always prudent to consult with a financial adviser to ensure that the decision fits your unique financial narrative. Interestingly, an estimated 1.6 million mortgage deals are set to conclude in 2024. Could yours be among them?

Top Tips for Remortgage Readiness

Initiate the Remortgage Process Early

Waiting until the eleventh hour under the illusion that mortgage rates will drop further can be a gamble. The market’s unpredictability underscores the importance of stability and certainty, attainable through early engagement with a mortgage adviser. These professionals are well-versed in navigating various lenders’ offer periods, empowering you to secure a deal that aligns with your financial goals.

Enhance Your Credit Score

Your credit score is instrumental in unlocking favourable mortgage terms. While various factors influence creditworthiness, proactive steps can bolster your score, even marginally. For more insights into enhancing your credit rating, click here.

Register on the Electoral Roll

Ensure you are registered on the electoral roll and keep your details current. Lenders utilise this information to verify your identity, which can also slightly enhance your credit score.

Avoid Overdraft Usage

In the months leading up to your mortgage application, steer clear of using your overdraft. Lenders might view this as financial mismanagement.

Curb Large Expenditures

Anticipate lenders requesting your recent bank statements to verify income consistency and assess your mortgage affordability, especially if interest rates escalate.

Refrain from Applying for New Credit

Patience is crucial; hence, a gap of at least six months is recommended between seeking new credit and applying for a mortgage to avoid adverse effects on your credit score and mortgage prospects.

Prepare Your Documentation

Accumulate all necessary documents well in advance—bank statements, payslips, proof of address, and ID documents. Preparation can facilitate a smoother application process.

Maintain Timely Bill Payments

Consistency in bill payments enhances your credit file. Late payments can persist on your credit history for years; setting up direct debits can help avoid this.

Are You Ready to Remortgage?

If you are contemplating whether it’s too soon to remortgage, consulting a mortgage adviser is wise. Premature remortgaging might incur early repayment charges, underscoring the need for professional guidance.

Our specialists are adept at advising the optimal remortgage timing and can navigate the entire process, accessing deals not typically available on the high street. Our aim is to tailor a mortgage solution that perfectly suits your individual financial circumstances.



1371 720 Tony Flynn

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